So much time and focus is nowadays devoted to the EU’s future-oriented tax agenda that it’s easy to forget about the existing tax proposals that are still on the table: public country by country reporting (CBCR), the common consolidated corporate tax base (CCCTB), and the financial transaction tax (FTT). How are they doing?
At the 11-12 September ECOFIN meeting of EU finance ministers, there were few new developments or breakthroughs, as everyone seems to be in a waiting mode. When will the OECD find an agreement on both pillars? And what about the European Commission’s green tax proposals? We will have to wait until 2021 to find out.
In the meantime, though, we’ve seen some recent developments on outstanding and long-standing tax files, such as public CBCR, the CCCTB and the FTT.
On public CBCR, German finance minister Olaf Scholz hinted, at a 21 September tax webinar organised by the European Commission, that the German Council presidency would bring the file into the ministerial agenda ‘soon’ after all. He underlined that the German government itself is split on the issue, with the social democrats supporting and CDU/CSU opposing. However, he committed that Germany would support ‘any debate and decision-making’ on the file, especially if there is a solid majority of member states supporting it (as now would seem to be the case with Austria being in favour and Germany abstaining from voting).
Reaching an agreement on the FTT is something that’s close to Scholz’s heart. There will reportedly be a full Council Working Group meeting on this subject on 29 October, i.e. involving all EU member states, not just those which have been working on the FTT under enhanced cooperation. This would be consistent with the idea of making the FTT a future Commission ‘own-resource’, as it would require the participation of all member states.
There has been much scepticism about the prospect of the FTT being agreed upon by the ten enhanced cooperating countries, let alone by all 27 EU member states. Many countries question the purpose of the FTT as it now stands, as its scope has been narrowed down to such a degree that the yields hardly justify their collection. However, Scholz believes that if the FTT was a Commission own-resource and used to service the Commission’s debt for funding its covid recovery package, then even those countries with meagre FTT yields would be persuaded of the proposal’s merits. If the Commission is capable of repaying its debts to the financial markets independently, EU member states will not need to chip in. The next few weeks will show if Scholz’s optimism is warranted.
And finally, during the same September tax webinar, the Commission’s director for direct taxation, Benjamin Angel, gave an interesting update on the CCCTB. The CCCTB file has stalled in Council negotiations for four years now, with no breakthrough in sight. However, some progress has been achieved on specific elements of the CCCTB proposals, and the Commission might ‘slice out’ these elements from CCCTB and re-propose them as separate initiatives. One possible example could be taking out the part of CCCTB addressing the debt-equity bias in taxation, which the Commission has identified as a key element to foster capital market integration in Europe.
Perhaps then proposals such as CBCR, the FTT and CCCTB, which have all been lying on negotiation tables for years, can come back if the momentum is right. You may have heard the Commission say that ‘nothing is agreed until everything is agreed’. It seems that for EU tax initiatives, ‘nothing is revoked until everything is revoked’.
Home >Articles > EU watch: CBCR, the CCCTB and the FTT
EU watch: CBCR, the CCCTB and the FTT
So much time and focus is nowadays devoted to the EU’s future-oriented tax agenda that it’s easy to forget about the existing tax proposals that are still on the table: public country by country reporting (CBCR), the common consolidated corporate tax base (CCCTB), and the financial transaction tax (FTT). How are they doing?
At the 11-12 September ECOFIN meeting of EU finance ministers, there were few new developments or breakthroughs, as everyone seems to be in a waiting mode. When will the OECD find an agreement on both pillars? And what about the European Commission’s green tax proposals? We will have to wait until 2021 to find out.
In the meantime, though, we’ve seen some recent developments on outstanding and long-standing tax files, such as public CBCR, the CCCTB and the FTT.
On public CBCR, German finance minister Olaf Scholz hinted, at a 21 September tax webinar organised by the European Commission, that the German Council presidency would bring the file into the ministerial agenda ‘soon’ after all. He underlined that the German government itself is split on the issue, with the social democrats supporting and CDU/CSU opposing. However, he committed that Germany would support ‘any debate and decision-making’ on the file, especially if there is a solid majority of member states supporting it (as now would seem to be the case with Austria being in favour and Germany abstaining from voting).
Reaching an agreement on the FTT is something that’s close to Scholz’s heart. There will reportedly be a full Council Working Group meeting on this subject on 29 October, i.e. involving all EU member states, not just those which have been working on the FTT under enhanced cooperation. This would be consistent with the idea of making the FTT a future Commission ‘own-resource’, as it would require the participation of all member states.
There has been much scepticism about the prospect of the FTT being agreed upon by the ten enhanced cooperating countries, let alone by all 27 EU member states. Many countries question the purpose of the FTT as it now stands, as its scope has been narrowed down to such a degree that the yields hardly justify their collection. However, Scholz believes that if the FTT was a Commission own-resource and used to service the Commission’s debt for funding its covid recovery package, then even those countries with meagre FTT yields would be persuaded of the proposal’s merits. If the Commission is capable of repaying its debts to the financial markets independently, EU member states will not need to chip in. The next few weeks will show if Scholz’s optimism is warranted.
And finally, during the same September tax webinar, the Commission’s director for direct taxation, Benjamin Angel, gave an interesting update on the CCCTB. The CCCTB file has stalled in Council negotiations for four years now, with no breakthrough in sight. However, some progress has been achieved on specific elements of the CCCTB proposals, and the Commission might ‘slice out’ these elements from CCCTB and re-propose them as separate initiatives. One possible example could be taking out the part of CCCTB addressing the debt-equity bias in taxation, which the Commission has identified as a key element to foster capital market integration in Europe.
Perhaps then proposals such as CBCR, the FTT and CCCTB, which have all been lying on negotiation tables for years, can come back if the momentum is right. You may have heard the Commission say that ‘nothing is agreed until everything is agreed’. It seems that for EU tax initiatives, ‘nothing is revoked until everything is revoked’.
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